China Steel Corp (中鋼), the nation’s biggest steelmaker, yesterday said the company’s board of directors approved a lower cash dividend distribution of NT$1.4 per extraordinary share and NT$1 per common share, after net profit plummeted 71 percent annually amid sagging steel demand.
The Kaohsiung-based company saw its net profit plunge to NT$17.78 billion (US$583.3 million) last year, compared with NT$62.05 billion in 2021.
Gross margin dipped to 7.1 percent last year, from 20.35 percent a year earlier, as persistent weakness in steel demand cut steel prices, it said.
Earnings per share dropped to NT$1.15 last year from NT$4.02 a year earlier, when the company paid shareholders a NT$3.1 per share cash dividend.
The latest cash dividend plan represents a higher payout ratio of 87 percent, compared with last year’s 77 percent.
The new distribution proposal is subject to the approval of shareholders during its annual general meeting on June 16 in Kaohsiung.
China Steel has been in the red for the past five months, but it saw significant improvement with its pretax loss totaling NT$1.09 billion last month, compared with a pre-tax loss of NT$2.97 billion in December last year, which could be attributed to cost reductions and asset disposal gains, it said.
Revenue shrank 15.27 percent month-on-month to NT$26.24 billion last month from NT$30.97 billion the previous month, as shipments and prices decreased, the company said.
Shipments dropped 10.24 percent to about 548,971 tonnes last month, compared with 611,590 tonnes the previous month, the company said.
China Steel expects a rebound in the second quarter, as a major earthquake in Turkey this month could curb steel exports from the region.
Meanwhile, steel demand is picking up as China’s economy improves since its reopening, it said.
The company has raised domestic steel prices by up to NT$1,200 per tonne for delivery next month, it said, citing rising raw material costs and an upward trend in global markets.
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